Week Three Case Study
Eastern Gear, Inc. Case Study
1. What are the major problems being faced by Eastern Gear?
Eastern Gear is a manufacturing company that sells customized gears to their clients. Since the company’s operations began, it faces many problems; one of which results from the inconvenience of having a customer base consisting of small laboratories and manufacturers. This makes it so that a gear, once customized and sold, is rarely sold a second time (Schroeder, Goldstein, & Rungtusanatham, 2013). Moreover, although the company has the capacity for accepting “larger orders for 100 gears or more,” these tend to slow down the production of the smaller orders; thus, causing frequent delays in delivering the final products to the small order customers because there is no separate operating room for small orders versus big orders (Schroeder, Goldstein, & Rungtusanatham, 2013, p. 450-451). Currently “20 percent of the orders…appear to be behind schedule” (Schroeder, Goldstein, & Rungtusanatham, 2013, p. 452). Consequently, Eastern Gear’s factory layout is far from efficient. The production order of the gears does not match the layout of the factory floor. For example, the drilling center which succeeds the milling center is located diagonally opposite of the milling center, and spans almost the entire factory floor—imagine carrying tons of materials across the entire factory just to continue the next step of the production process. Additionally, the heat treating center which precedes the shipping dock again spans the entire factory floor. With each specialty center located so far from each other it is no wonder that “a typical order spends 90 percent of its time waiting in line…only 10 percent of the time is actually spent processing the order” (Schroeder, Goldstein, & Rungtusanatham, 2013, p. 451). 2. What action should Mr. Rhodes take to solve his problems? As President of Eastern Gear, Inc. Roger Rhodes needs to make an...
References: Schroeder, R. G., Goldstein, S. M., & Rungtusanatham, M. J. (2013). Operations Management in the Supply Chain - Decisions and Cases (6th ed.). New Delhi: McGraw Hill Education.
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